The Appellate Division recently held equitable relief is available under the New Jersey Spill Compensation and Control Act (“Spill Act”), N.J.S.A. 58:10-23.11, et seq., for the investigation of contamination before relative responsibility for remediation is established.
The New Jersey Appellate Court, in Matejek v. Watson (N.J. Super. Ct. App. Div., Mar. 3, 2017), upheld a judgment obligating five condominium owners to participate in and equally share the cost of investigating the cause of contamination without first requiring proof that property owners contributed to the contamination.
In 2006 the New Jersey Department of Environmental Protection (“NJDEP”) removed five underground storage tanks (“USTs”) from five adjoining condominium units after the discovery of oil on the surface of a tributary to Royce Brook. After NJDEP removed the USTs and confirmed the lack of continued flow of oil into the tributary, NJDEP stopped work. However, the case file remained open, which the Matejek trial court considered a “cloud on title.” Seven years later, one of the condominium owners sought to complete the investigation of contamination in order to remove the cloud on title and brought an action to force the other owners’ participation in the investigation.
The Court agreed the plaintiffs required an approach “that would fairly burden all the potential dischargers with an investigation into the actual cause, the remediation of the property if necessary, and the fixing of responsibility for the discharge on those truly responsible.” The Matejek ruling opens the door for actions to compel the sharing of investigation costs before proof of liability for the discharge is established.
Although the parties in Matejek were required to share in the cost of the investigation, the Court held that the costs would be re-apportioned once the actual causes of the contamination are known. At that time, non-responsible parties would have the opportunity to seek reimbursement of costs incurred during the investigation.
The Matejek decision raises additional options for parties seeking contribution for investigating contamination. Contribution actions often hinge on who develops the factual information most favorable to their interests. Based on our experience in contribution actions, taking prompt action to position clients in the best possible light can be critical. The availability of preliminary equitable relief under the Matejek decision increases the importance of marshalling your facts at the earliest opportunity to minimize exposure.